It has been announced that Equitable Life policyholders who transferred to Standard Life's with profits annuity will not receive any windfalls from the company's demutualisation. They have said that any windfalls from a stock market flotation of the company would not go to clients who had transferred out of an Equitable Life drawdown fund into a Standard Life with profits annuity.
In letters sent to policyholders, it was stated that under HM Revenue & Customs rules that when a personal pension policyholder transferred their annuity to another insurer it was the administrator of the original fund that held membership rights.
As owners of the annuities, Equitable Life and not the policyholder is eligible to any demutualisation benefits, estimated to be between £500 and £1,000 each.
Our view
This is utterly appalling! Yes, contractually it may be correct but it again does no favours for beleaguered former policyholders.